RBI imposes penalty on Progfin, Shri Ram Finance Corporation for non-compliance

Mumbai: The Reserve Bank of India (RBI) on Friday said it has imposed a penalty on Progfin and Shri Ram Finance for non-compliance with certain provisions and directions.

The central bank imposed a Rs 8.10 lakh monetary penalty on Shri Ram Finance Corporation, and Rs 2.70 lakh on Progfin, a release said.

Shri Ram Finance Corporation was penalised as it "failed to take prior written permission of the RBI while appointing a director, resulting in a change in management, on account of a change in more than 30 per cent of its directors, excluding independent directors", it added.


The company was also penalised as it failed to put in place a system to categorise its customers as low, medium and high risk category; and failed to upload KYC records of certain customers onto Central KYC Records Registry within the prescribed timeline, the RBI said.

Progfin faced a penalty as the company failed to put in place a system of periodic review of risk categorisation of accounts, with such periodicity being at least once in six months, the release said.